Syllabus Contents

Course Description

Examination of the risks faced by managers of financial institutions and the methods and markets through which these risks are managed. Consideration is given to a wide array of financial institutions including commercial banks, credit unions, investment banks, securities firms, insurance companies and investment companies. Cross-listed as FINC 395.

Course Overview

In this course we will be examining the various types of financial instruments and how financial institutions and others use them. We will also look at management of commercial banks and other financial institutions, as well as the factors that impact those institutions. Our studies will include a discussion of the liquidity crisis that started in 2008. In addition to our textbook, we will be using other materials to assist us including: PowerPoint presentations, videos and Internet sites. You will have the opportunity to research and synthesize information, and demonstrate your knowledge by writing an essay and a research paper. Additionally, you will complete flow-of-funds related problems from the text. To wrap up the session, you will complete a stock performance assessment.

Technology Requirements

Participation in this course will require the basic technology for all online classes at Columbia College:

Course Objectives

To provide a basic knowledge of the financial markets and institutions that comprises the US financial system.

To understand why various types of financial markets exist and the roles different financial institutions play within these markets.

Measurable Learning Outcomes

Define the term structure of interest rates.

Explain how interest rates are determined in an economy.

Calculate the flow of funds within each type of financial market.

Identify the key financial instruments of the money and capital markets.

Explain the role of interest rates in financial markets.

Analyze the role of the Federal Reserve in the U.S. financial system and the major tools of monetary policy.

Explain what is meant by cyberbanking and the impact of e-money on the banking industry and monetary policy.

Explain the workings of banks including the sources and uses of their funds and the determination of loan and deposit interest rates.

Explain the efficient market's hypothesis and discuss how it explains interest rate determination.

Explain the evolution of money in the U.S. economy and discuss the functions money plays in an economy.

Explain the major assets and liabilities of depository financial institutions.

Explain the basic principles of bank management and performance evaluation.

Explain the relationship among various interest rates in an economy.

Identify the various types of non-depository financial institutions in an economy.

Explain the main types of financial institutions and explain why financial intermediaries exist.

UG

Grading

Grading Scale

Grade

Points

Percent

A

900-1000

90-100%

B

800-899

80-89%

C

700-799

70-79%

D

600-699

60-69%

F

0-599

0-59%

Grade Weights

Assignment Category

Points

Percent

Discussion

120

12%

Text Assignments

160

16%

Quizzes & Exams

480

48%

Essay

40

4%

Research Paper

200

20%

Total

1000

100%

Schedule of Due Dates

Week 1

Assignment

Points

Due

Introductions

—

Wednesday

Discussion 1

5

Discussion 2

5

Saturday

Responses

5

Sunday

Dropbox Assignment 1

25

Week 2

Assignment

Points

Due

Discussion 3

5

Wednesday

Discussion 4

5

Saturday

Responses

5

Sunday

Dropbox Assignment 2

20

Quiz 1

40

Week 3

Assignment

Points

Due

Discussion 5

5

Wednesday

Discussion 6

5

Saturday

Responses

5

Sunday

Dropbox Assignment 3

20

Essay

40

Week 4

Assignment

Points

Due

Discussion 7

5

Wednesday

Discussion 8

5

Saturday

Responses

5

Sunday

Dropbox Assignment 4

20

Midterm

200

Week 5

Assignment

Points

Due

Discussion 9

5

Wednesday

Discussion 10

5

Saturday

Responses

5

Sunday

Dropbox Assignment 5

20

Week 6

Assignment

Points

Due

Discussion 11

5

Wednesday

Discussion 12

5

Saturday

Responses

5

Sunday

Dropbox Assignment 6

15

Quiz 2

40

Week 7

Assignment

Points

Due

Discussion 13

5

Wednesday

Discussion 14

5

Saturday

Responses

5

Sunday

Dropbox Assignment 7

15

Research Paper

200

Week 8

Assignment

Points

Due

Discussion 15

5

Wednesday

Discussion 16

5

Saturday

Responses

5

Dropbox Assignment 8

25

Final Exam

200

Total Points: 1000

Assignment Overview

Discussions

Online discussion postings should be complete by the due dates listed in the course schedule, and courteous and respectful responses to at least two classmates for each question or my follow up questions should be posted by Sunday at 11:59 PM, Central Time, of the assigned week. All postings MUST BE in the student’s own words I do not want you quoting the textbook for your posts. Postings will be graded according to the discussion grade criteria table. In addition to the assigned question, students should use the discussion area to share their thoughts on and questions about the course work. I will be checking postings, asking and responding to questions regularly. In addition to writing your own postings, please make sure you read each other’s and mine. I will post additional questions and I expect responses. Please remember, “Nice Post!” or “Very clearly stated!” or other phrases of that type do not constitute a good response. Please review the Late Assignment Policy.

Weekly Assignments

There are assignments from the text to be completed and handed in each week. The assignments are listed in the course schedule above. The assignments are due each Sunday at midnight. Please submit your assignments with all problems in one document, preferably in MS Word and PDF. Also, do not submit the questions in the problem, because Turnitin will return a false positive on similarity. Please review the Late Assignment Policy.

Essay

A 3 - 5 page, double-spaced, descriptive essay written in MLA style is to be completed by each student.
I insist on 3 – 5 full pages of written work—not including title pages, exhibits, and bibliography. Essays shorter than 3 full pages will receive a “0%”. The essay will be worth 40 points and is due Sunday of Week 3. You will write on one of the following subjects:

Monetary Policy

Theories about the term structure of interest rates

The role of depository financial institutions

The role of non-depository financial institutions

Computerization and banking

The role and nature of money

The commercial banking system

You are required to cite at least three sources. YOU MAY NOT USE WIKIPEDIA OR OUR TEXTBOOK AS A SOURCE! The essay will be graded according to the criteria listed on the rubric on the last page of this syllabus. You will submit the essay to the drop box as either a Word document or a Rich Text Format (RTF) document on or before the due date. Please review the Late Assignment Policy.

Research Paper

A 7-10 page, double-spaced analytical research paper written in MLA style is to be completed by each student. That’s a 7-10 full page of written work—not including title pages, exhibits, and bibliography. Exhibits such as graphs, tables, & pictures, should be in a separate section at the end of the paper, just before the bibliography. Papers shorter than 7 full pages will receive a “0%”. The paper will be worth 200 points and is due Sunday of Week 7. You will write on one of the topics listed on pages 26-28 of your text.

You are required to cite at least five sources. YOU MAY NOT USE WIKIPEDIA OR YOUR TEXTBOOK AS A SOURCE! The paper will be graded according to the criteria listed on the rubric on the last page of this syllabus. You will submit the paper to the Dropbox as either a Word document or a Rich Text Format (RTF) document on or before the due date. Please review the Late Assignment Policy. If you are unsure what a research paper entails, I invite you to check out this website from the Purdue University Online Writing Project for guidance. http://owl.english.purdue.edu/owl/

I ACTIVELY CHECK ALL PAPERS AND ESSAYS FOR PLAGIARISM! Consequences for plagiarism will include receiving a “0%” for the paper or essay and referral to the appropriate authorities at the college for further disciplinary action. Plagiarism includes but is not limited to:

1. Handing in a term paper or essay purchased on the web as your own work – save your money, this is very easy to catch.
2. Copying sections of your paper or essay from websites without noting sources.
3. Copying a large portion of your paper or essay from any source or sources – cited or not. You can quote sources, but I expect the great majority (at least 75%) of the written work to be your original material.
4. Using a paper that you have written but previously used for another class without my permission.

If you are unclear as to what constitutes plagiarism, check out this website:http://www.indiana.edu/~wts/wts/plagiarism.html
A Plagiarism Tutorial is posted under the Content area of D2L.
I do not tolerate academic dishonesty and I suggest you do not test me on this issue. I will be using Turnitin.com. Turnitin.com examines each paper and essay and determines what percentage of them came from the web – either from a website or from a paper purchased on the internet.

Quiz

There will be 2 quizzes – one in week 2 and one in week 6. They should be completed by Sunday, at 11:59 PM, Central Time, the week assigned. Each quiz is worth 40 points and you will have two chances to complete each quiz.

Exams

There will be online midterm and final exams, each worth 200 points. Each exam will be timed. You will be given 3 hours to complete each exam.

Course Outline

Click on each week to view details about the activities scheduled for that week.

IntroductionsIntroduce yourself in the "Introductions" thread of our class discussion, our "virtual classroom". Please give us more than your name. Include your profession, hobbies, why you are taking this class, and any other information that can help us get to know you.

Discussion 1Additionally, in the “Discussion Question 1” thread, please post your thoughts on the
following: Imagine a world without Financial Institutions. How would transactions occur between Surplus Units and Deficit Units? What would happen to the level of fund flows? Why? Please post your response in the appropriate thread by Wednesday at 11:59 PM, Central Time

Discussion 2As I write this, the national debt is about $16.8 trillion dollars. What is the current Treasury bill rate? Is that rate low or high? If you consider the Loanable Funds Theory, does that level of interest rates make sense? Why or why not? Also, there are several theories about the reason the yield curve is shaped the way it is and why it changes from time to time. What are they? Is there one that you believe explains the shape better than the others? Why? Is there a place you can visit that would give you evidence of the shape of the yield curve at the present time? Please post your response by Saturday, at 11:59 PM, Central Time.

I have posted a link to a “Frontline” video “Inside the Meltdown” in the content section of the
course for this week. Answer the following questions:

a. The video discusses the Repo Market and Bear Stearns reliance on it. What is the Repo Market and how was Bear Stearns impacted by it?
b. What was the impact of the near failure of Bear Stearns and the failure of Lehman Brothers on Money Markets?
c. What was the impact on the market for longer-term securities?
d. What actions were taken by the Federal Reserve and the Treasury Department?
e. What was the impact of those actions?
f. Do you think those actions were justified? Why?

Please post your response by Wednesday, at 11:59 PM, Central Time.

Discussion 4

In the early 1980s, interest rates on long-term debt were at remarkable levels – above 15% with some even higher. Within a decade, rates had dropped precipitously. I have a couple of questions about that:

a. What would the effect of a decline in interest rates on those instruments have on their price?
b. What impact would that decline have on other financial instruments? (Mortgages, Money
Market Instruments, Stock)
c. What does the change in prices after a significant change in interest rates say about the relationship of price and interest rates?
d. Most of the bonds that had been issued in the early 1980s were no longer on the market by the mid-1990s. Why do you suppose that is?

Discussion 5As a small investor, can I invest – either directly or indirectly - in mortgages? What kind of risks would I be undertaking if I did? Are there any other financial instruments that have similar risks? Given the current economic situation, would you invest in mortgages? Why or why not? What about these other financial instruments that I asked about, would you invest in them? If the risks are similar to the risks inherent in mortgages, would you make the same decision as you would with mortgages? Please post your response by Wednesday, at 11:59 PM, Central Time.

Discussion 6I would like you to answer the following question about bonds: Contagion Effects of Credit Crisis. Explain how the credit crisis adversely affected many other people beyond homeowners and mortgage companies.

Discussion 7The book discusses the Efficient Market Hypothesis (EMH) and its three forms. The EMH has a lot to do with information and stock prices. How does information get into prices? How do we know if prices reflect all available information? What are abnormal returns? What does the EMH have to say about abnormal returns? Please post your response by Wednesday at 11:59 PM, Central Time.

Discussion 8Your friend just told you about a penny stock he purchased, which increased in price from $0.10 to $0.50 per share. You start investigating penny stocks, and after conducting a large amount of research, you find a stock with a quoted price of $0.05. Upon further investigation, you notice that the ask price for the stock is $0.08 and that the bid price is $0.01. Discuss the possible reasons for this wide bid-ask spread.

Discussion 9Please explain the role of the Intermediary in an Interest Rate Swap transaction? What function does the intermediary perform? As intermediaries perform their service for a fee, do you think that there may be a cheaper way for a financial institution to achieve their goal of reducing interest rate risk? Please post your response by midnight Wednesday.

Discussion 10The book discusses central bank intervention in the foreign exchange market to influence the value of a particular currency. I have a couple of questions. How big is the market for foreign currency? Do you think that central bank intervention is a good idea? Why or why not? Please post your response by Saturday, at 11:59 PM, Central Time.

Discussion 11What is the TED Spread and what happened to it just after Lehman Brothers collapsed? What does the TED spread indicate about sources of funds for commercial banks? Does the condition of the TED Spread after the Lehman Brothers collapse give you any indication of issues within the economy in general and in commercial banking specifically? Please post your response by Wednesday, at 11:59 PM, Central Time.

Discussion 12The Glass-Steagall Act of 1933 was passed in response to the perception that Commercial Bank engagement in securities trading was a significant contributing factor to the stock market crash of 1929. Whether that perception is true or not is subject to debate. The Gramm-Leach- Bliley Act of 1999 basically repealed the Glass-Steagall Act. There has been some suggestion that the Gramm-Leach-Bliley Act was a significant contributing factor to the liquidity crisis in 2008 and the recession that followed. Do you think that the Gramm-Leach-Bliley Act contributed to the liquidity crisis? Why or why not? Post your response in the appropriate thread no later than Saturday at 11:59 PM, Central Time.

Course EvaluationPlease evaluate the course. You will have an opportunity to evaluate the course near the end of the session. A link sent to your CougarMail will allow you to access the evaluation. Please note that these evaluations are provided so that I can improve the course, find out what students perceive to be its strengths and weaknesses, and in general assess the success of the course. Please do take the time to fill this out.

Discussion 13The book discusses the valuation of a commercial bank. Some of the factors that are discussed are the Required Rate of Return, the Risk Free Rate, and the Risk Premium. Who determines the Required Rate of Return, the Risk Free rate and the Risk Premium? Is this one of the things determined by the Federal Reserve? How would I look them up? Please post your response by Wednesday, at 11:59 PM, Central Time.

Discussion 14The Savings and Loan crisis of the late 1980s is discussed in the book – a bit. The Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Garn-St. Germain Depository Institutions Act of 1982 (GSGDIA) contributed to the crisis. How? The Financial Institutions Reform, Recovery, & Enforcement Act of 1989 (FIRREA) was passed in response to the crisis. What effect did FIRREA have on the prior regulations? Are there any similarities between the S&L crisis and the latest financial crisis? Post your response in the appropriate thread no later than Saturday at 11:59 PM, Central Time.

Discussion 15Net Asset Value (NAV) of a mutual fund is calculated every day. The book suggests that a closed-end fund (a fund that has a fixed number of shares) can trade above or below the NAV. So the cost of investing in (or removing your investment from) a mutual fund can be different than the NAV. That seems odd –and yet it is true. Why does this happen and why does it make perfect sense? Also, there are a variety of other options that investors can utilize to obtain the diversification benefits other than mutual funds. As an example, someone could invest in Exchange Traded Funds (ETF) or an investment company such as Berkshire Hathaway. Are these options superior to mutual funds? If so, how? If not, why not? Please post your response no later than Wednesday at 11:50 PM, Central Time.

Discussion 16The book discusses Defined Benefit and Defined Contribution Pension plans (401k & 403b) and says that there are more Defined Contribution plans than Defined Benefit plans, but that there are more participants in Defined Benefit plans. This is a relatively recent (over the last 20 years) phenomenon. Companies have been moving away from Defined Benefit plans in favor of Defined Contribution plans. Why has this shift been taking place? Why do you think that there are more participants in Defined Benefit plans? Post your response no later than Saturday at 11:59 PM, Central Time.

Final ExamAll online, timed, 3 hours. The exam is worth 200 points and will be all multiple choice. Chapters 13 through 25 will be covered. Please complete your exam by Saturday at 11:59 PM Central Time.

Course Policies

Student Conduct

All Columbia College students, whether enrolled in a land-based or online course, are responsible for behaving in a manner
consistent with Columbia College's Student Conduct Code and
Acceptable Use Policy. Students violating these policies will be
referred to the office of Student Affairs and/or the office of Academic Affairs for possible disciplinary action. The Student
Code of Conduct and the Computer Use Policy for students can be found in the Columbia College Student Handbook. The
Handbook is available online; you can also obtain a copy
by calling the Student Affairs office (Campus Life) at 573-875-7400. The teacher maintains the right to manage a positive
learning environment, and all students must adhere to the conventions of online etiquette.

Plagiarism

Your grade will be based in large part on the originality of your ideas and your written presentation of these ideas. Presenting
the words, ideas, or expression of another in any form as your own is plagiarism. Students who fail to properly give credit for
information contained in their written work (papers, journals, exams, etc.) are violating the intellectual property rights of the
original author. For proper citation of the original authors, you should reference the appropriate publication manual for your
degree program or course (APA, MLA, etc.). Violations are taken seriously in higher education and may result in a failing grade on
the assignment, a grade of "F" for the course, or dismissal from the College.

Collaboration conducted between students without prior permission from the instructor is considered plagiarism and will be treated
as such. Spouses and roommates taking the same course should be particularly careful.

All required papers may be submitted for textual similarity review to Turnitin.com for the detection of plagiarism. All submitted
papers may be included in the Turnitin.com reference database for the purpose of detecting plagiarism. This service is subject to the
Terms and Conditions of Use posted on the Turnitin.com site.

Non-Discrimination

There will be no discrimination on the basis of sex, race, color, national origin, sexual orientation, religion, ideology, political
affiliation, veteran status, age, physical handicap, or marital status.

Student Accessibility Resources

Students with documented disabilities who may need academic services for this course are required to register with the office of Student Accessibility Resources. Until the student has been cleared through this office, accommodations do not have to be granted. If you are a student who has a documented disability, it is important for you to read the entire syllabus as soon as possible. The structure or the content of the course may make an accommodation not feasible. Student Accessibility Resources is located in Student Affairs in AHSC 215 and can be reached by phone at (573) 875-7626 or email at sar@ccis.edu.

Online Participation

You are expected to read the assigned texts and participate in the discussions and other course activities each week. Assignments
should be posted by the due dates stated on the grading schedule in your syllabus. If an emergency arises that prevents you from
participating in class, please let your instructor know as soon as possible.

Attendance Policy

Attendance for a week will be counted as having submitted any assigned activity for which points are earned. Attendance for the week is based upon the date work is submitted. A class week is defined as the period of time between Monday and Sunday (except for week 8, when the work and the course will end on Saturday at midnight.) The course and system deadlines are based on the Central Time Zone.

Cougar Email

All students are provided a CougarMail account when they enroll in classes at Columbia College. You are responsible for monitoring
email from that account for important messages from the College and from your instructor. You may forward your Cougar email account to
another account; however, the College cannot be held responsible for breaches in security or service interruptions with other email
providers.

Students should use email for private messages to the instructor and other students. The class discussions are for public messages
so the class members can each see what others have to say about any given topic and respond.

Late Assignment Policy

An online class requires regular participation and a commitment to your instructor and your classmates to regularly engage in the reading, discussion and writing assignments. Although most of the online communication for this course is asynchronous, you must be able to commit to the schedule of work for the class for the next eight weeks. You must keep up with the schedule of reading and writing to successfully complete the class.

No late discussion posts will be accepted.

There may be extenuating circumstances that prevent you from submitting your work by the required due date. If you anticipate issues or a situation arises, please contact me immediately. Late work, if approved, may be subject to a penalty.

• Online Discussions and Responses – Will not be accepted late.

• Weekly Assignments – Exercises and problems from text should be completed on time.
Late submissions may be approved with a 10% penalty per day. Week 8 assignments will not be accepted late.

• Essay and Research Paper – Essay and Research paper should be completed on time. Late submissions may be approved with a 10% penalty per day.

• Mid-term and Final Exam – Will not be accepted late.

Course Evaluation

You will have an opportunity to evaluate the course near the end of the session. A link will be sent to your CougarMail that will
allow you to access the evaluation. Be assured that the evaluations are anonymous and that your instructor will not be able to see
them until after final grades are submitted.

Additional Resources

Orientation for New Students

This course is offered online, using course management software provided by Desire2Learn and Columbia College. The course user guide provides details about taking an online course at Columbia College. You may also want to visit the course demonstration to view a sample course before this one opens.

Technical Support

If you have problems accessing the course or posting your assignments, contact your instructor, the Columbia College Helpdesk, or the D2L Helpdesk for assistance. Contact information is also available within the online course environment.

Online Tutoring

Smarthinking is a free online tutoring service available to all Columbia College students. Smarthinking provides real-time online tutoring and homework help for Math, English, and Writing. Smarthinking also provides access to live tutorials in writing and math, as well as a full range of study resources, including writing manuals, sample problems, and study skills manuals. You can access the service from wherever you have a connection to the Internet. I encourage you to take advantage of this free service provided by the college.